Gold fever to result in new futures

Thailand's derivatives market plans to introduce smaller-sized gold futures contracts within the next few months, aiming to broaden retail participation as gold prices continue their historic rally.

- NUNTAWUN POLKUAMDEE

On Feb 9, silver futures plunged by 10.3% to $22.25 per ounce, while gold futures fell around 10%, avoiding circuit breaker rules.

(BLOOMBERG)

Gold has surged by more than 70% over the past year, with domestic prices climbing above 80,000 baht per baht-weight — an all-time high.

The sharp rise has turbo-boosted trading demand of gold futures contracts on the Thailand Futures Exchange (TFEX), prompting it to develop more accessible products for smaller investors.

Triwit Wangvorawudhi, the new managing director of TFEX, said the exchange is finalising plans to introduce small-lot gold futures contracts, potentially sized at one baht-weight of gold.

The smallest current contracts are for 10 baht-weight of gold, with a contract value approaching 100,000 baht.

“We are studying the most appropriate size, but the new contractis likely to have a value between 5,000 and 10,000 baht,’ he said.

“This will allow retail investors to hedge risk and manage their portfolios more efficiently”